I am advised by the Revenue Commissioners that pay (which includes bonus payments) is appropriate to the year that it is earned and the tax to the year it is deducted. For administrative purposes, where an employer makes a payment that refers to a previous year it applies the current tax credits and standard rate cut-off point to the pay. Where the employee is no longer in the employment, the employer deducts the tax by reference to the amount of the employee's tax credits and standard rate cut-off point, had the payment been made on the date the employee ceased to be employed.
The taxpayer in question ceased employment in November 2008 and received the bonus payment in March 2009. In May and June 2010 the taxpayer's final liability was reviewed for the years 2008 and 2009 and PAYE Balancing Statements issued. The bonus payment was appropriated to 2008 and the tax to the year 2009. The tax overpaid in 2009 was offset against the arrears for 2008. I am also informed by the Revenue Commissioners that as income tax on bonus payments is not distinguished on the P35 return from income tax on other employment income, it is not possible for the Revenue Commissioners to provide statistics on the number of recipients of bonus pay or of the tax deducted there from.